Indiana should spend $3 million for Amtrak's Hoosier State subsidy

Employees come and go as shifts change at the Amtrak maintenance center in Beech Grove. The center employs about 550 workers with hourly wages starting at $28. If the state refuses to subsidize daily Amtrak trips from Indianapolis to Chicago, the repair shop could lose work, and Indiana could lose jobs.

On Oct. 1 a $4 million federal subsidy for Amtrak's Hoosier State Line to Chicago ends and that may threaten the massive train repair yard in Beech Grove. The question: whether Indiana should spend $3 million to replace the federal subsidy.

For months now this has been gnawing at local officials, state legislators, members of Congress and union reps. Should we pay the subsidy or risk losing 550 jobs with a $49 million annual payroll?

Of course, Congress voted in 2008 ago to end the subsidy for routes like the Hoosier State. Imagine the plans that could be in place if all those folks had spent the last five years thinking about how to save the route and the jobs.

This isn't a rant about blowing a deadline, though. Too many editors could out me as a hypocrite if that were my beef.

No, this is about Indiana's inability to see rail as anything other than a 19th-century novelty despite its massive contribution to our state's economy.

You see, we still marvel that Indianapolis developed the first Union Station, a bona fide boon to rail travel, yet we fail to invest the public and private capital to develop a massive switching yard to capitalize on Chicago's gridlocked rail system.

While neighboring states invest millions developing plans for high-speed rail between major cities, our state government pads the budget surplus enough to return a $111 tax credit.

Convenient, efficient travel between cities won't always be defined by cars. Energy costs and technology may even change the equation in my lifetime and you can bet high-speed rail will be part of the plan.

Wait, did I say plan? That assumes forethought, and waiting five years to decide whether to spend $3 million to save a $49 million payroll is not forethought. Now that I mention it, though, let's take these numbers for a spin.

The payroll at the Beech Grove repair shop represents hourly wages starting at $28 for skilled labor. These are the kinds of jobs that move a state's economy. The loss of jobs like these since the recession of 1981-82 is one of the main reasons behind Indiana's lagging per capita income.

Most of the jobs being created in Indiana, especially those backed by state and local tax incentives, pay far less than $28 an hour. When Honda opened its plant in Greensburg, for instance, the starting hourly wage was less than $20 an hour. And that's high compared to the others touted by the Indiana Economic Development Corp.

If Indiana cannot do a better job creating jobs like those in the Amtrak repair shop, it better make sure it does what it can to preserve them.

Now the $4 million federal subsidy is a lot of money. So is the possible $3 million state subsidy. The Hoosier State line hauls about 3,100 people up to Chicago each month, so the federal per-ticket subsidy is about $107.50. A state subsidy would amount to about $80.60 per ride.

The passenger pays between $38 and $47 for a ticket to ride the Hoosier State line. Apparently the train's real value, though, is to haul broken cars to Beech Grove and return fixed cars to service.

In this case, Beech Grove maintains 550 good jobs and a $49 million annual payroll if the subsidy is paid. From this Indiana collects more than $1.6 million in income tax and at least twice that in income tax even if the $61 million economic impact estimate's high.

You could argue the state realizes a net gain in the deal.

But it's a subsidy! The railroad must pay for itself!

Baloney. Every inch of public highway, railroad track and runway in the United States is subsidized by tax dollars. It may feel like extortion when we're threatened with the closure of a rail line, but Americans determined a long time ago that the public purse would help pay for transportation.

For a state that knows a lot about growing crops, we've been eating our seed for a long time when it comes to transportation. Sure, Major Moves spent billions, mostly for highway improvements, but the comprehensive plans on the Conexus and Indiana Department of Transportation websites don't go into fine-grain detail about how to integrate highways, railroads, airports and the state's ports, much less how to improve and expand them to benefit the state's economy.

Waiting until the deadline to decide whether to pony up only ensures we've missed another opportunity to take a deep look at our opportunities to leverage transportation to strengthen our economy. If we continue to blow deadlines when it comes to transportation, we'll end up with a lot of dead lines.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Email this article

Indiana should spend $3 million for Amtrak's Hoosier State subsidy

Funny things, deadlines. On Oct. 1 a $4 million federal subsidy for Amtrak's Hoosier State Line to Chicago ends and that may threaten the massive train repair yard in Beech Grove.